CAPIS Morning Note – 11/21/23: Stocks Slip After Another Multiple Day Rally

Overnight Summary: The S&P 500 closed Monday higher by 0.74% at 4547.38 from Friday by 0.13% at 4514.02. The overnight high was hit at 4567 at 10:40 p.m. EST while the low was hit at 4555 at 5:10 a.m. EST. The range overnight was 12 points as of 6:25 a.m. EST. The 10-day average of the overnight…

Overnight Summary: The S&P 500 closed Monday higher by 0.74% at 4547.38 from Friday by 0.13% at 4514.02. The overnight high was hit at 4567 at 10:40 p.m. EST while the low was hit at 4555 at 5:10 a.m. EST. The range overnight was 12 points as of 6:25 a.m. EST. The 10-day average of the overnight range is at 13.90 from 14.20.  The average for May-October average was 22.06 from 20.96. Currently, the S&P 500 is lower by -6.25 points which is  -0.14% at 6:25 a.m. EST.

Executive Summary: Stocks are a bit lower this morning after some mixed earnings from Best Buy and Lowe’s as they guided lower but Dick’s beat.  Key to afternoon trading will be the latest FOMC Minutes release and clues about whether they are done raising rates for now.

  • US Existing Home Sales, FOMC Minutes, API Crude Data
  •  ECB Lagarde speaks today
  • NVDA Earnings After Hours will drive trading in QQQ

Earnings Out After The Close: 

  • Beats: ZM +0.21, KEYS +0.12, A +0.04, BRBR +0.01 of note.
  • Flat: None of note.
  • Misses: SYM (0.08) of note.

Capital Raises:

  • IPOs Priced or News:
    • IPO ELAB 1.5 Million shares priced at $4.00.  Underwriter: Univest Securities.
  • New SPACs launched/News:
    • Arisz Acquisition Corp. (ARIZ) Announces Extension of Deadline to Complete Business Combination.
    • Colombier Acquisition Corp. II (CLBR) Announces Pricing of Upsized $150 Million Initial Public Offering.
    • Global Partner Acquisition Corp. II (GPAC): Stardust Power to go public through business combination with Nasdaq Listed Global Partner Acquisition Corporation II
    • Seaport Global Acquisition II Corp (SGIIU) Announces Termination of Merger Agreement with American Battery Materials, Inc. and Redemption of Public Shares.
  • Secondaries Priced:
    • OVV: Announces upsize and pricing of offering of common stock by a selling stockholder.
  • Notes Priced of note:
    • AL: Announces Pricing of Offering of C$500 Million of Senior Unsecured Medium-Term Notes.
    • UBER: Announces Pricing of Upsized $1.5 Billion Convertible Senior Notes Offering.
  • Common Stock filings/Notes:
    • AUGX: Announces Closing of Public Offering of Common Stock, Including Additional Investments from HCA Healthcare and Redmile GroupProvides Incremental Capital to Expand Augmedix’s Commercial Team, while Accelerating Development of Product Roadmap to Address New Market Segments.
    • CNSP: Filed Form S-3.. 3,756,000 Shares of Common Stock.
    • CRTD: Filed Form S-1.. 82,715,688 Shares of Common Stock.
    • CVM: Announces Closing of $5 Million Public Offering of Common Stock.
    • GANX: Proposed Public Offering. (Newbridge Bookmanager)
    • RELI: Proposed Underwritten Public Offering. (EF Hutton Bookmanager)
      • Withdraws Proposed Underwritten Public Offering.
    • STN: Files $250 million public offering of common shares.
  • Direct Offering:
    • RVPH: Closing of $30 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules.
  • Selling Shareholders of note:
    • ELUT: Filed Form S-3..18,577,644 Shares Class A Common Stock Offered by the Selling Securityholders.
    • OVV: Secondary Offering of Common Stock by a Selling Stockholder. (GS Underwriter)
    • PX: Files for 22,243,654 shares of common stock by selling shareholders.
    • UAL: Filed Form S-3ASR Mixed Shelf Offering.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • APD: Filed Form S-3ASR Mixed Shelf Offering.
  • Debt/Credit Filing and Notes: None of note.
  • Tender Offer: None of note.
  • Convertible Offering & Notes Filed:
    • NEP: Announces anticipated effective date of resale registration statement with respect to common units issuable upon conversion of 2.50% convertible senior notes due 2026.
    • SBSW: Launching $500 million senior unsecured guaranteed convertible bonds due 2028.
    • WT: Completes Repurchase of Non-Voting Preferred Shares Convertible into 13.1 Million Shares of WisdomTree Common Stock from a Subsidiary of the World Gold Council.

Capital Raise Summary From The TradeXchange, bringing traders and investors real time news and Squawk Box, and other sources.

News After The Close :

  • After Hours Movers: 
    • MCAF: +64% MCAF Stockholders approved the Business Combination Proposal
    • LQR: +29% Repurchases 1,476,355 Shares in Ongoing Share Buy Back Initiative
    • MRAI: +21% Insider Purchase
    • SYM: +20% Earnings
    • GLMD: +19% Announces a delay in the initiation of its Primary Sclerosing Cholangitis (PSC) Phase 2a Study
    • A: +5.5% Earnings
    • RNW: +3.5% Initiated BUY @ Mizuho
    • KEYS: +2.5% Earnings
    • ZM: +1% Earnings
  • News Items After the Close:
    • Agilent’s (A) stock is rising on earnings, revenue beats. (MarketWatch)
    • Keysight (KEYS) stock gains after company eyes ‘recovery’ (MarketWatch)
    • Live Nation (LYV) issued subpoena regarding ticketing, fees by US Senate panel. (Reuters)
    • Rivian Automotive (RIVN) CEO Robert Joseph Scaringe assuming direct responsibility for all product functions, including software, autonomy, design, vehicle, electrical, propulsion, and programs.
    • Frequency Electronics (FEIM) Announces Contract Award for Approximately $19 Million.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Allient (ALNT) CFO Michael Leach to retire.
    • Becton Dickinson (BDX) announces that Ronald Silverman has been named executive vice president and chief medical officer.
    • eHealth (EHTH) COO Roman Rariy departing at the end of the year.
    • Erayak Power Solution Group Inc. (RAYA) Announces Receipt of Nasdaq Minimum Bid Price Notification.
    • Banco Itaú Chile (ITCL) Announces Effectiveness of Voluntary Delisting of ADSs from the New York Stock Exchange and Filing of Form 15F to Deregister with the U.S. Securities and Exchange Commission.
    • Immunic (IMUX) Receives Notice of Allowance for United States Patent Protecting Vidofludimus Calcium’s Dosing Regimens in Multiple Sclerosis.
    • Lufax (LU) to change ratio of its American Depositary Shares (ADSs) to its ordinary shares to 1:2 from the current ratio of 2:1.
    • Ziebart (NIR) Elevates Corporate Leadership Team, Furthering Commitment to Driving Growth and Innovation.
  • Buyback Announcements or News: 
    • A-Mark Precious Metals (AMRK) Increases Share Repurchase Program.
    • Diana Shipping Inc. (DSX) Announces Pro-Rata Distribution of Warrants to Purchase Common Stock.
    • LQR House (LQR) Repurchases 1,476,355 Shares in Ongoing Share Buy Back Initiative.
    • Riskified (RSKD) Receives Israeli Court Approval for $75 Million Share Repurchase Program.
    • Yatsen (YSG) Upsizing and Extension of Share Repurchase Program.
  • Stock Splits or News:
    • VTVT THAR reverse split stocks for today
  • Dividends Announcements or News: 
    • Hormel Foods (HRL) increases quarterly cash dividend 3% to $0.2825 per share from $0.275 per share. (MarketWatch)
  • Insider Sales Of Note: None of note.

What’s Happening This Morning: Futures value reflects the change with fair value.

S&P 500 -5, Dow Jones -35,  NASDAQ -28, and Russell 2000 -6.  (as of 7:56 a.m. EST).  Asia is higher ex Japan for a second day while Europe is lower this morning ex Germany. VIX Futures are at 14.80 from 14.78 yesterday.  Gold is higher while Silver and Copper are lower this morning. WTI Crude Oil and Brent Crude Oil are lower with Natural Gas higher. US 10-year Treasury sees yields at 4.414% from 4.486% yesterday. The U.S. Dollar is lower versus the Euro, lower versus the Pound and lower against the Yen. Bitcoin is at $37,235 from $37,121  yesterday, lower by -0.77% this morning.

Sector Action – (1/3/6/12/YTD Updated Weekly with Monday release):  

  • Daily Positive Sectors: Technology, Communication Services, Real Estate, Consumer Cyclical, Healthcare of note.
  • Daily Negative Sectors: None of note.
  • One Month Winners: Technology, Consumer Defensive, Real Estate, and Financials of note.
  • Three Month Winners: Technology, Communication Services, and Financial of note.
  • Six Month Winners: Technology, Communication Services, Consumer Cyclical, Energy of note.
  • Twelve Month Winners: Technology, Communication Services, and Consumer Cyclical of note.
  • Year to Date Winners:  Technology, Communication Services, Consumer Cyclical and Industrials of note.

The news on OpenAI employees moving over to Microsoft (MSFT) spurred a rally in those shares, helping power stock indexes higher. The S&P 500 climbed 0.7%, and the tech-heavy Nasdaq Composite advanced 1.1%. The Dow Jones Industrial Average rose 0.6%, or around 204 points.   Coming off three straight weeks of gains, the S&P 500 is now up 8.4% this month and 18% for the year. The recent rally has been fueled by growing bets that the Federal Reserve is done raising interest rates. But optimism about AI has continued to be a tailwind as well, extending a trend that kicked off last year after OpenAI’s release of its ChatGPT Chatbot.  (WSJ – edited by QPI)

Upcoming Earnings Of Note: (From Chartroom Software – sorted by market cap, highest to lowest with most visible names)

  • Tuesday After the Close:

  • Wednesday Before the Open:

Earnings of Note This Morning:

  • Beats: BIDU +3.22, DY +1.07, KC +1.04, HIBB +0.87, ANF +0.65, DKS +0.40, EMBC +0.19, KSS +0.18, BBY +0.10, MDT +0.07, CAL +0.07, LOW +0.04, BURL +0.01 of note.
  • Flat: NJR of note.
  • Misses: J (0.13), ADI (0.01) of note.
  • Still to Report: AEO of note.

Company Earnings Guidance:

  • Positive Guidance: SYM, ZM, HIBB, DKS of note.
  • Negative Guidance: KEYS, A, EMBC, LOW, J, BURL of note.

Erlanger Research Advance/Decline Chart:

Gap Ups & Down In Early Pre-Market:

  • Gap Up: SYM +22%, CNTB +22%, BURL +12%, A +7%, DY +6% of note.
  • Gap Down: MOR -25%, RCEL -12%, KC -8%, LOW -5%, STN -4% of note.

Insider Action: XRAY, MRCY, DOW sees Insider buying with dumb short selling.  No stock sees Insider buying with smart short sellers.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

  • Five Things You Need To Know Before You Start Your Day. (Bloomberg)
  • 5 Things To Know Before The Stock Market Opens. (CNBC)
  • Bloomberg Lead Story: OpenAI in discussions to end mutiny. (Bloomberg)
  • Bloomberg Most Shared Story: Nearly all of OpenAI threatens to go to Microsoft if entire board does not resign. (Bloomberg)
  • China warns Argentina not to cut ties. (CNBC)
  • U.S. Futures waver as stock futures seem stretched: Market Wrap. (Bloomberg)
  • Best Buy (BBY) cuts sales forecast as shoppers hunt for deals. (CNBC)
  • Dick’s (DKS) beats earnings as bounces back from theft issues. (CNBC)
  • Lowe’s (LOW) cuts numbers as homeowners take on less projects. (CNBC)

Moving Average Update:

  • Score remains at 97%.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the Presidential Daily Briefing, 10:15 a.m. EST
    • The President holds a meeting on progress to counter the flow of fentanyl into the United States, 11:00 a.m. EST
    • The President and The First Lady depart the White House en route to Joint Base Andrews, 5:10 p.m. EST
    • The President and The First Lady depart Joint Base Andrews en route to Nantucket, Massachusetts, 5:40 p.m. EST
    • The President and The First Lady arrive in Nantucket, Massachusetts [Note: staying at residence of David M. Rubenstein], 6:50 p.m. EST

Economic:

  • Chicago Fed Activity Index 8:30 a.m. EST
  • Redbook Sales 8:55 a.m. EST
  • October Existing Home Sales is due out at 10:00 a.m. EST and is expected to fall to 3.90 million from 3.96 million.
  • The latest Federal Reserve Open Market Committee (FOMC) Minutes are due out at 2:00 p.m. EST.
  • API Crude Oil Data 4:30 p.m. EST

Federal Reserve / Treasury Speakers:  None of note.

M&A Activity and News: 

  • Jacobs Engineering (J) to spin-off and merge its critical mission solutions and cyber & intelligence government services businesses with amentum, creating an independent, publicly traded company.
  • Merck (MRK) to Acquire Caraway Therapeutics, Inc.
  • TechnipFMC (FTI) announces an agreement to sell the Company’s Measurement Solutions business to One Equity Partners for $205 million in cash.
  • The Home Depot (HD) Enters into Agreement to Acquire Construction Resources Parent Company, International Designs Group.

Meeting & Conferences of Note:

  • Sellside Conferences: None of note.
      • Previously posted and ongoing conferences:
        • 121 Mining Investment
        • BTIG Digital Health Forum
        • TD Securities Canadian Technology Conference
  • Top Shareholder Meetings: AGLE, RIOT, TLRY, VTLE
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: EBZT, ECOR, IREN, MDU, SEED
  • Update: None of note.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings: None of note.
      • Previously posted and ongoing conferences: None of note.

Top Tier Sell-side Upgrades & Downgrades:

The recommendations listed below in this “Upgrade/Downgrade” section are compiled from what we believe are Tier I, II and III firms. Recommendations posted are taken from a variety of sources each day and we only post upgrades or significant initiations as well as downgrades to underweight or sell. The purpose of this posting is to make the reader aware of market-moving recommendations. None of these recommendations should be interpreted as actual recommendations from CAPIS or its employees.

Today’s Upgrades and Downgrades:

Previous Day’s Upgrades and Downgrades: